Precision Drilling (PD.TO)

The stock has been hit lately. Their oeprations were doing well over the past few quarters. Then, PD announced they would buy Trinidad (during a market downturn), so their stock collapsed. He's trying to understand their rationale behind that announcement. Their last quarter was weak. Hold onto itnow. The stock could snap back if Ensign tops up their bid for Trinidad. Not sure what's going to happen.

It's cheap. Buy it now, but it'll take time. No downside risk.

The company has recently gained traction as demand for their Tier I rigs has increased. He is challenged to see how utilization rates can go much higher. He would prefer to own Trican (TCW-T) instead at this point.

Is the largest driller in Canada. Did very well in Q2 in US, but less so in Canada. Debt has gone up, so they have some balance sheet concerns. Has other names in this sector that may be better with higher growth potential and less balance sheet concerns.

Oil services stocks have suffered, but it's had an uptrend for the past 12 months. It's likely it'll hold at current levels and could rise above $5.40. The sector should move up.

He really likes the energy space and sees PD-T putting in good earnings going forward. They have 80 rigs in the US and 60 rigs in Canada. They have seen day rates go from $18,000 per day up to $25,000 per day recently. Margins continue to improve, costs are under control, and they are putting rigs back into service. E&P capex budgets are increasing in North America and with WTI being at $65-$80 he thinks companies will continue to spend. Management continues to build a strategy to lower the debt levels. Yield 0%. (Analysts’ price target is $6.04)

Troubled by this stock. Is drilling going to become increasingly more expensive? He’s highly, highly cautious. If we leave the Paris Accord, there will be a huge reduction in oil and gas exploration. If this company has to rely on continued resource exploration to be profitable, he’d be really cautious.

It is a very good company. They have very high debt. The balance sheet is severely stressed. There are other names you can go to.

To him this looks like it could be setting up for a positive move. Recent highs and lows are progressing. I recently broke through a significant high and could be nearing a good buy. He would rank it 7 out of 10. He would leg into it cautiously.

If capital returns to Canada following the pipeline announcement, this will do well. He thinks PD-T has a long way to run as they have been upgrading their fleet. Yield 0%. (Analysts’ price target is $5.57 )

It supplies rigs to oil exploration companies, so it's a highly cyclical name. Too unpredictable for him. His style is buy-and-hold long-term, but it looks like it's been turning up as oil rises.